United States District Court, D. Nevada
ROBERT L. CITROEN, LAW CORPORATION, a Nevada corporation, Plaintiff,
MICRON OPTICS, INC., a Georgia corporation, Defendant. MICRON OPTICS, INC., a Georgia corporation, Counterclaimant,
ROBERT L. CITROEN, LAW CORPORATION, a Nevada corporation, ROBERT L. CITROEN, an individual, Counter-Defendants.
ORDER RE: ECF NO. 42
WILLIAM G. COBB, UNITED STATES MAGISTRATE JUDGE
the court is Defendant/Counterclaimant Micron Optics,
Inc.'s (Micron) Motion to Compel Income and Tax Records.
(ECF Nos. 42, 42-1 to 42-16.) Plaintiff/Counter-Defendants
Robert L. Citroen, Law Corporation and Robert L. Citroen, an
individual (collectively, Citroen) filed a response. (ECF No.
45.) Micron filed a reply (ECF Nos. 48, 48-1 to 48-5), as
well as a supplemental reply (ECF Nos. 50, 50-1 to 50-4). The
court held a hearing on the motion on August 25, 2017, where
it heard argument from the parties. (Minutes at ECF No. 51.)
The court issues the instant Order granting Micron's
Robert L. Citroen, Law Corporation's Complaint
L. Citroen, Law Corporation sued Micron in State court on
August 18, 2016. (ECF No. 1-1 at 4.) The complaint alleges
that Citroen and Micron entered into an assignment agreement
that was characterized as a settlement payment to resolve
claims for amounts due for advice and services provided but
not paid for. The complaint alleges that Micron agreed to pay
Citroen a total of $500, 000 ($12, 500 per quarter per year
for ten years). Micron made payments on July 1, 2014, October
1, 2014, in all four quarters of 2015, and in January and
April of 2016, but thereafter purportedly refused to pay,
asserting the payments were for legal services. Citroen
contends that Micron breached the agreement, and also
includes claims for unjust enrichment, conversion,
anticipatory breach and misrepresentation.
removed the action to federal court on October 3, 2016 (ECF
No. 1), and shortly thereafter filed its answer and
counterclaims against Robert L. Citroen, Law Corporation and
Robert L. Citroen individually (ECF No. 5). Micron claims
that Citroen provided (or represented they were providing)
outside legal services to Micron until sometime in November
2011. Micron alleges that Citroen is the president of Citroen
Law Corporation, Micron's former legal counsel, and was a
member of Micron's board of directors from 2000 until
November 14, 2011. Micron states that in 2004, Micron Optics
International AG (MOIAG) was formed as an entity under the
laws of Liberia to operate as an independent reseller of
Micron's products in Asia. MOIAG's stock was held
equally by Karlsson & Bergkvist (Schweiz) A.B. (K&B)
and Metallikon A.G. until 2014.
claims that Citroen failed to disclose that he was operating,
controlling and/or had an ownership interest in Metallikon,
which held half of MOIAG's shares. Micron goes on to
allege that MOIAG profited from its relationship with Micron
and distributed profits to shareholders, including Citroen
(through Metallikon) and that Citroen received distributions
while he was legal counsel/board member to Micron. Micron
avers that Citroen and others set up another entity,
Technica, S.A., for their own financial benefit, and that
Citroen's wife was an undisclosed owner/operator of both
MOIAG and Technica. Micron asserts that Citroen, through a
fiduciary position with Micron, used these entities to funnel
profits and structure the $500, 000 payoff from Micron and
improperly received self-payments through fraud.
alleges that the agreement referenced by Citroen was
precipitated by an agreement entered into by Micron with
K&B and Metallikon for the sale of MOIAG, where K&B
and Metallikon agreed to sell their shares of issued stock of
MOIAG to Micron for $100, 000, and the agreement also
included a provision for settlement of a purported debt for
services provided by Sades Establissements Karoly (SADEK) to
MOIAG and owed by MOIAG, which was to be assumed by Micron.
This included payment of $500, 000 to SADEK in quarterly
installments of $12, 500. The same date the agreement was
entered into, SADEK assigned its interest to Citroen.
According to Micron, Citroen's interest in the agreement
was not disclosed to or approved by Micron's board of
directors or shareholders. Micron made 7 quarterly payments,
for a total of $87, 500.
contends that in 2008, Citroen had resigned his law license
after pleading guilty to a felony of possession of five or
more false identification documents and false statements, but
failed to disclose this to Micron while still billing it for
legal services. Micron did not discover this until March of
2016, along with his financial interests in Metallikon, MOIAG
and Technica, and stopped making the quarterly payments.
discovery, Micron requested documents and information
relating to Citroen's financial interests in the entities
involved in the alleged MOIAG fraud scheme. In its initial
set of requests for production of documents, it sought,
inter alia, documents reflecting income, funds or
benefits from any source from January 1, 2004 to the present,
as well as tax returns for the past fifteen years, including
attachments, schedules and forms. (ECF No. 42-4 at 5,
Requests 1, 3.) Citroen objected to the first request on
grounds that it was overbroad; unclear regarding the use of
the terms “funds” and “benefits”;
that the documents were in Micron's possession; and that
it sought confidential, privileged documents that are
unrelated to this lawsuit. (ECF No. 42-5 at 4.) Without
waiving the objections, Citroen stated it did not have any
documents reflecting income, funds or benefits from Micron.
(Id.) In response to the request for tax returns,
Citroen objected that the request was overbroad and sought
confidential, privileged documents unrelated to this case.
(ECF No. 42-5 at 4-5.) Without waiving the objections,
Citroen responded that it had no responsive documents.
parties met and conferred, and Micron explained that it
sought the documents in connection with its allegations that
Citroen had an ownership/financial interest in the
above-described entities related to the fraudulent scheme.
(ECF Nos. 42-6 at 2-6, 42-2 at 7-8 ¶ 7, 42-7 at 2.)
During the meet and confer, Micron's counsel contends
that Citroen's counsel represented that Citroen no longer
had any records or tax documents responsive to the requests,
saying: “he is an old man and doesn't keep copies
of things.” (Id.) Following the meet and
confer, Citroen served supplemental responses, but they did
not significantly differ from the original responses. (ECF
No. 42-8.) Citroen's counsel reiterated that Citroen
“do[es] not have many of the documents that you
requested.” (ECF No. 42-7 at 2.)
light of the representation that Citroen did not have the
documents requested, Micron served a second set of discovery
asking for executed authorizations to allow Micron to obtain
the tax records directly from the IRS; for documentation of
income, funds or benefits received from MOIAG, Technica,
Metallikon, K&B and SADEK; and, for the name and contact
information for Citroen's accountants and tax
preparers/consultants used to prepare tax returns. (ECF Nos.
42-9 at 5, 42-11 at 5, 42-10 at 5-6, and 42-12 at 5.)
responded with objections, and produced no documents. Citroen
objected to the request for authorizations for the tax
returns on the basis that it was not a request for
production, was ambiguous, unlimited as to time, sought
confidential, privileged information, and was unrelated to
this case. (ECF No. 42-13 at 3, ECF No. 42-14 at 4.)
response to the requests for documents of income, funds or
benefits received from the other entities, Citroen objected
that the requests were overbroad, unlimited as to time,
sought irrelevant information, and were ambiguous. (ECF No.
42-13 at 4-6; ECF No. 42-14 at 4-6.) Without waiving the
objections, they responded that they did “not believe
there are any documents reflecting any payments” from
these entities in the past ten years. (Id.)
the request for contact information for accountants and tax
preparers/consultants, Citroen objected that the requests
were ambiguous, unlimited as to time, sought confidential,
privileged information, and sought irrelevant information.
(ECF No. 42-15 at 3-4, ECF No. 42-16 at 3-4.)
parties met and conferred again on July 3, 2017. (ECF No.
42-2 at 5 ¶¶ 20-22.) Citroen maintained that the
information sought was confidential and not relevant, while
Micron continued to assert that the information was relevant
to its counterclaims. (Id.) Citroen represented it
would produce any 1099s from those entities, but refused to
provide the information for the accountants and tax
preparers/consultants or authorize the release of the tax
7, 2017, Citroen represented it did not receive a 1099 from
SADEK, MOIAG, Technica, or Metallikon and would supplement
their response, but as of July 20, 2017, ...